Benzinga | Dec 13, 2021 09:13AM EST

Nucor Takes Majority Stake In California Steel Industries

Nucor Corp (NYSE:NUE) has agreed to acquire a majority stake in California Steel Industries, Inc. (CSI) by purchasing a 50% equity stake from a subsidiary of Vale SA (NYSE:VALE) and a 1% equity ownership stake from JFE Steel Corporation (JFE).

* The company will be a joint venture between Nucor and JFE. Nucor will pay $400 million for Vale's 50% enterprise value, approximating less than 6.0x historical average EBITDA.

* CSI is a flat-rolled steel converter capable of producing more than two million tons of finished steel and steel products annually. CSI has over 800 full-time and temporary employees and five product lines.

* "Acquiring a majority ownership stake in California Steel Industries expands our geographic reach in sheet steel and gives us a strong presence on the West Coast," commented Nucor CEO Leon Topalian.

* Nucor had cash and cash equivalents of $2.29 billion as of October 2, 2021.

* Price Action: NUE shares are trading higher by 0.70% at $114.00, VALE higher by 3.25% at $13.96 during the premarket session on Monday.